- 2024-07-30T00:00:00
- Company Research
MBB released its consolidated results for H1 2024 with PBT of VND13.4tn (USD529mn; +5% YoY), completing 46% of our full-year forecast. This implies Q2 2024 PBT of VND7.6tn (+32% QoQ; +23% YoY). Overall, MBB’s results were broadly in line with our forecast with QoQ improvement in NIM, asset quality, and ongoing strong NOII. We see no major risk to our earnings forecast, pending a more extensive review.
- H1 2024 consolidated credit growth was 9.4%, which was derived from (1) loan growth of 10.3% and (2) a 4.0% decrease in MBB’s corporate bond balance vs Q4 2023. As of Q2 2024, corporate bonds accounted for 5.2% of MBB’s total credit exposure (vs 9.2% as of Q4 2022). Additionally, lending to real estate businesses accounted for 6.7% of MBB’s total loan book (vs 7.1% in 2023).
- H1 2024 customer deposits growth was 9.0%. Q2 2024 CASA ratio was 38.6% (+2.0 ppts QoQ; +1.6 ppts YoY), which is by far the highest level in our coverage. MBB currently serves 28 million customers (+40% vs end-2022) and it targets 30 million customers by the end of 2024.
- H1 2024 NIM of 4.17% (-118 bps YoY) was lower than our full-year forecast of 4.33%. However, Q2 2024 NIM improved significantly by 54 bps to 4.58% due to (1) a 12-bp QoQ increase in the IEA yield and (2) a 46-bp QoQ decrease in funding costs. We attribute the improvement in the IEA yield to (1) easing NPL formation and supporting lending rates for customers, and (2) strong recovery from written-off bad debts. Additionally, MBB’s decrease in funding costs was mostly due to ongoing CASA improvement and rolling old customer deposits to lower yields.
- H1 2024 NOII was VND6.6tn (+73% YoY), completing 61% of our full-year forecast and tracking well ahead of our expectation, supported by (1) strong fee income, (2) higher-than-expected gains from trading FX and investment securities, and (3) strong recovery from written-off bad debts (+67% YoY).
- In H1 2024, the consolidated CIR of 30.6% was higher than our full-year forecast of 29.5%. At MBB’s recent AGM, management targeted to control the CIR below 30%.
- Bad debt metrics improved significantly QoQ given the resolved NPL case of a big corporate client in June. The Q2 2024 NPL ratio and Group 2 loans levels were 1.64% (-85 bps QoQ; +19 bps YoY) and 1.84% (-46 bps QoQ; -176 bps YoY), respectively.
- H1 2024 provision expenses surged 54% YoY from a low base and tracked slightly ahead of our expectations. We note that MBB was one of the few banks that reported a YoY decrease in 2023 provision expenses. However, Q2 2024 provision expenses decreased 26% QoQ, which we believe was partly due to a provision reversal for the major CIC-related NPL case solved in June. Q2 2024 LLR was 101.7% (+ 21.7 ppts QoQ; -54.4 ppts YoY).
MBB’s consolidated H1 2024 results
VND bn | H1 2023 | H1 2024 | YoY | Q2 2023 | Q2 2024 | YoY |
NII | 19,709 | 19,593 | -0.6% | 9,481 | 10,531 | 11.1% |
Non-interest income | 3,782 | 6,553 | 73.3% | 2,079 | 3,598 | 73.0% |
OPEX | (7,703) | (8,005) | 3.9% | (4,135) | (4,491) | 8.6% |
PPOP | 15,787 | 18,141 | 14.9% | 7,426 | 9,639 | 29.8% |
Provision expenses | (3,052) | (4,713) | 54.4% | (1,203) | (2,006) | 66.8% |
NPAT-MI | 9,917 | 10,559 | 6.5% | 4,893 | 6,027 | 23.2% |
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Loan growth** | 12.5% | 10.3% | -2.2 ppts | 7.6% | 9.5% | 1.9 ppts |
Deposit growth** | 7.2% | 9.0% | 1.8 ppts | 5.1% | 10.7% | 5.6 ppts |
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NIM | 5.35% | 4.17% | -118 bps | 5.04% | 4.58% | -46 bps |
Interest-earning asset yield | 9.26% | 7.23% | -203 bps | 9.27% | 7.38% | -189 bps |
Cost of funds | 4.61% | 3.46% | -115 bps | 4.85% | 3.27% | -159 bps |
CASA ratio* | 37.1% | 38.6% | 1.6 ppts | 37.1% | 38.6% | 1.6 ppts |
CASA ratio plus term deposits in FX | 38.3% | 39.9% | 1.6 ppts | 38.3% | 39.9% | 1.6 ppts |
CIR | 32.8% | 30.6% | -2.2 ppts | 35.8% | 31.8% | -4.0 ppts |
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NPLs / Gross loans | 1.44% | 1.64% | 19 bps | 1.44% | 1.64% | 19 bps |
Group 2 loans / Gross loans | 3.59% | 1.84% | -176 bps | 3.59% | 1.84% | -176 bps |
Accrued interest / IEAs | 1.21% | 0.87% | -34 bps | 1.21% | 0.87% | -34 bps |
Source: MBB, Vietcap — *CASA volume included demand deposits and margin deposits; ** Q2 2023 and Q2 2024 loan and deposit growth is QoQ growth; H1 2023 and H1 2024 loan and deposit growth is 6M growth.
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